WACC
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Blues Inc. is an MNC (Multinational Corporation) located in the United States. Blues would like to estimate its weighted average cost of capital. On average, bonds issued by Blues yield 9 percent.
On average, bonds issued by Blues yield 9 percent. Currently, T-bill rates are 3 percent. Furthermore, Blues' stock has a beta of 1.5, and the return on the Wilshire 5000 stock index is expected to be 10 percent. Blues' target capital structure is 30 percent debt and 70 percent equity. If Blues is in the 35 percent tax bracket, what is its weighted average cost of capital?
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The solution explains how to calculate the WACC.
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WACC Blues, Inc. is an MNC located in the United States. Blues would like to estimate its weighted average cost of capital. On average, bonds issued by Blues yield 9 percent. Currently, T-bill rates are 3 percent. Furthermore, Blues' stock has a beta of 1.5, and the return on the Wilshire ...
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